WIAcademy EducateBlog

Financing is a major part of your real estate investing business and can take on many different forms, including bank loans, discount notes and mortgages, equity loans, exchanges, government grants and loans, lease options, owner financing, partners, and private money. It is important to understand the financing options available as well as how to create a strategy for each one.

Your business plan and financial plan play a critical role in implementing your financial strategies. For example, when applying for a bank loan, you must do your homework and find out what documents the bank requires before you actually apply for the loan. Then you want to make sure that your application is detailed, organized, and presents a clear picture of your ability to repay the loan. All banks want to lend money, so it is your job to have a professional loan application package when applying for any type of loan for your business.

Government grants and loans also require homework to make sure the necessary paperwork is completed to the exact requirements. This process is usually tedious and time consuming, but the payoff can often be substantial.

Other forms of financing include owner financing and discount notes and mortgages. These work best for properties with long-term seller financing where the properties have substantial equity and can often be converted into purchase money loans. Understanding exchanges gives you another financial strategy to capitalize on that many investors don’t even think about, and Lease Options give you the strategy to buy real estate with little or no money down.

Other alternatives include finding a money partner or private moneylender. Financial partners are often investors who want to profit from real estate investing without being involved in the business. Private moneylenders are also looking to profit in real estate, and they focus on the value of the property instead of the creditworthiness of the borrower.

With so many financing strategies, where do you begin? The first step is learning what the strategies are and when and how to use them. A Creative Real Estate Financing class will give you that knowledge. With this financial knowledge, you’ll then have the ability to grow your business and meet your goals as a successful real estate investor.

Posted 06:46 AM | Permalink | Comments (1)

One of the first things you learn when you go into business is that you can’t do everything yourself. You need help from other people, but not just anyone and everyone. You need expert help from professionals, such as an accountant, a banker, an insurance agent, a mortgage broker, a title company, and, of course, both real estate agents and brokers.

How do you find all these experts? The best way to find the right people for your team is through networking. Networking may come naturally for some entrepreneurs, but for many it has to be learned. In a recent CareerJournal.com article, Harvey Mackay lists six techniques to overcome the fear of networking:

1. Practice “let’s pretend.”
2. Adopt a role model.
3. Take lessons.
4. Keep taking lessons.
5. Join up.
6. Have a little faith in yourself.

Unless networking is “as natural and instinctive as breathing,” you should consider taking a class like Intensified Real Estate Training that will show you how to network while you learn the ins and outs of real estate. In this hands-on training class, professionals just like the ones you’ll need for your real estate investing business actually come into the classroom to help you understand what they do and how to network with them.

Another article, written by Kelley Robertson in About.com, lists the five strategies to make your networking profitable:

1. Choose the right networking group or event.
2. Focus on quality contacts versus quantity.
3. Make a positive first impression.
4. Be able to clearly state what you do.
5. Follow up after the event.

These are great strategies and exactly what the Mentoring Program does for you. A mentor will target the professionals with the required expertise in your community who can help you have a successful real estate investing business. Then they will guide you through the process of meeting with some of these potential power team experts, like a banker or a broker.

You may be asking yourself the next obvious question, “Once I find the expert, how do I get them to help me for little or no money?” I like what Zig Ziglar, a famous author and motivational speaker, says, "You can have everything in life you want if you will just help enough other people get what they want.” In other words, the people on your power team will help you succeed because they understand that in return you will be helping them succeed. For example, when you develop a relationship with a Realtor, he or she is willing to accept a lower commission while working hard to exceed your expectations so that you will bring them more business and make them more successful. It’s a win-win for everyone, which explains why it always works.

Posted 10:33 PM | Permalink | Comments (0)

Many factors should be considered when choosing the type of entity for your real estate investing business. You have to look at the initial costs, the ongoing costs and requirements of maintaining the entity, and the liabilities associated with the type of entity you select. There are several options available, each of which comes with both advantages and disadvantages.

Sole Proprietorship
A sole proprietorship is the easiest and least expensive option. The set-up costs may include a fee to register a fictitious business name, local newspaper advertising costs, and the cost of either a county or city business license. Disadvantages for this simple choice include an unlimited amount of personal liability, no benefit from business income tax rates, and the inability of the business being sold or passed on to any heirs.

Partnerships
Two or more legal entities or individuals normally create this form of entity with a written agreement specifying the purpose, duties, transferability, and management of the partnership. The big disadvantage is that each general partner has unlimited liability. Also, since each partner is self-employed, the partner’s share of income is shown on their individual tax returns. A limited partnership reduces liability since most of the partners are limited partners, which means they have limited liability. These limited partners, however, do not usually take part in the management of the partnership.

“C” Corporation
A “C” corporation has an unlimited number of shareholders, each of which may consist of any type of legal entity. Limited liability and tremendous tax benefits offer great advantages; however, “C” corporations are the most complex type of entity to set up and to maintain. There are also strict requirements that must be followed, so as not to risk losing the limited liability benefit of the corporation. Another disadvantage of a “C” corporation is the double taxation associated with dividend income.

“S” Corporation
An “S” corporation differs from a “C” corporation in that the corporation’s income directly passes directly to the shareholders’ personal tax return, eliminating the double taxation problem. However, “S” corporations are generally limited to a maximum of 75 shareholders, which makes going public practically impossible.

Limited Liability Company
A limited liability company (LLC) is a hybrid corporation and partnership entity. It has the tax and liability benefits of a corporation with the management structure of a partnership. Articles of Organization are required and the members must establish an Operating Agreement.

Making the Right Choice
Since the entity you choose affects all aspects of your business, including advertising and marketing strategies, the legalities of running a business, taxes, and asset protection, you need to choose the one that best suits your situation. There are many books, software programs, and web sites available concerning business entities; however, none of these products offer the experience and knowledge of professionals who specialize in the real estate investing business.

To move beyond the planning stage you have to set up a business entity. The best way to do that is to take the time to learn the concepts and seek the qualified professionals who can help set up your entity. A great way to accomplish both at the same time is to find hands-on training with in-house experts in Asset Protection and Tax Relief. This will ensure that you take the steps necessary to set up your business for success from the very beginning of the business process.

Posted 09:29 PM | Permalink | Comments (1)

Even with the recent popularity of real estate investing and the acceptance of it into the world of academia, many still see it as a get-rich-quick scheme. That mindset paralyzes both potential and existing investors, resulting in them giving up before they even begin to develop a business. Many investors narrowly miss the opportunity of success because they fail to realize that if you know and apply proven real estate investing techniques the profit potential is unlimited.

As with any business, deciding on the type of business is the first step. Once you’ve decided on real estate investing, you know you have to learn the business of real estate and how to make money at foreclosures, property management, wholesale buying, etc. It is obvious that you have to know the strategies and continue learning to stay current with these strategies. However, many forget the other side of the equation that involves how to set up and operate a business.

All businesses, including real estate investing, begin and operate on similar principles using a business plan as a road map. Also, the majority of business plans have some version of the following four components listed by the Small Business Administration

1. The mission, purpose, or vision of the business.
2. A description of the business including marketing strategies, competition, and operating procedures.
3. Financial information including start-up capital, loans, loan applications, inventory sheets, balance sheets, profit and loss projections, and cash flow projections.
4. A statement about the management of the business.

In addition to the Small Business Administration, there are books, software programs, trained professionals, and web sites that address business plans. The disadvantage of using these tools to develop your business plan is that you lack the experience to know how to develop your plan for success. This is one of the advantages of using a Mentoring Program for your real estate business. You have an experienced business owner that also knows how to assess your finances and goals, based on your own unique situation, and help you develop a successful business plan.

You must have a business plan! Businesses without a plan fail because they have no target to aim for and no direction to move in, so they just stagnate and eventually fail. Utilize the resources available to learn the concepts of business planning, prepare a draft of your plan, and then find a mentor.

Posted 06:21 AM | Permalink | Comments (2) | TrackBacks (1)

With the housing market becoming red hot in many areas of the country the last few years, real estate and real estate investing has recently become a popular career path. Since we’ve already established that education is the first key to unlocking your potential to a successful real estate investing career, let’s look at the educational programs currently available.

The best training offers hands-on instructional strategies using in-the-field real-life situations. As mentioned in a previous article, in this type of training, you actually practice the techniques used by investors and receive personalized support for your new business. Some people, however, forget the fact that real estate investing is a business.

If you look at the world of academia, you’ll find that many colleges and universities now offer real estate investing classes and some have even established real estate degree programs. BusinessSchools.com lists 194 real estate programs at colleges and universities across the country. For example, the University of Southern California has a Master’s degree program titled Master of Real Estate Development. Their curriculum states, “The USC Master of Real Estate Development (MRED) program prepares graduates for key positions in real estate development.” These programs are geared toward “employee” positions. For example, a graduate of this MRED program is on the career path to employment with a large corporation or developer.

At Universities.com, Peirce College offers an online Bachelor Degree in Real Estate Management that focuses on preparing students to “develop, buy, sell, appraise, and manage real property” upon graduation. This is a non-traditional program since the Internet is used as the instructional method of delivery instead of in-person classroom instruction. The Real Estate Management program at Kellogg School of Management, Northwestern University, however, takes a more traditional classroom approach preparing students for a management position.

In the final analysis, it all comes back to the fact that the benefits of hands-on training are much greater than the other types of training for the individual looking for an entrepreneurial lifestyle. This type of training allows students to experience success through the eyes of actual investors. A nationwide reality-based school like Wealth Intelligence Academy offers hands-on training across the country; Internet classes that allow students to ask questions and interact with instructors; and, a mentoring program that focuses on students’ local real estate markets.

To determine the best education for you, you have to keep asking yourself these six questions:
1. Which method gives me the best chance for success?
2. Do I want to be taught by professors who learned real estate investing from books?
3. Or, do I want to be taught by successful investors who live investing, who are willing to share past mistakes with me, and who are committed to my success by mentoring me in my own local real estate market?
4. Do I want instructors who share my passion for real estate investing?
5. Is my definition of success defined as becoming an employee or becoming an independent real estate investor?
6. And finally, do I want a full-time life or a full-time job?

Once you’ve answered these questions, you’ll have your own definition of success and be able to choose appropriate classes for either the employee career path or an entrepreneurial lifestyle.

Posted 08:06 PM | Permalink | Comments (0)

Previous articles have acknowledged that foreclosure investing takes knowledge and perseverance. There is never a bad time to invest in real estate if you know the strategies and which ones to apply to certain market situations such as foreclosures.

In the world of real estate investing, there are many top-notch educational opportunities. The best offer hands-on training based on in-the-field situations where you walk through some of the steps to practice the techniques. For example, if you are in a foreclosure training class, you may actually go to a county clerk’s office to observe a sale. Or, you may inspect a house in foreclosure and prepare a cost analysis.

There are also thousands of at-home training products including audio, books, DVDs, games, online classes, telecommunications, and workbooks available. These methods alone, however, don’t offer the mentoring and coaching a new investor needs to take that step from knowing to doing. Since self-help is often a difficult road to take, personal advisors can make a big difference in becoming a successful investor.

In recent years, real estate investing has even become recognized in the world of academia. There are now accredited college courses about the subject of real estate investing; and, you can even get a college degree in real estate. The downside to the collegiate education, however, is that learning is limited to the classroom setting and to the books used in the classes.

With all these choices, how do you decide? You examine the education and training available and then answer these questions. Which method gives you the best chance for success? Do you want to be taught by professors who learned real estate investing from books? Or, do you want to be taught by successful investors who live investing, made past mistakes and are willing to share them with you, and have the passion for real estate investing that you do? Do you want the personalized approach of hands-on training and support for your new business? Once you answer these questions, you’ll know that hands-on training gives you the best chance for success.

Remember, learning the proven strategies and techniques of successful real estate investors is crucial to your success. This means that education is the first key to unlocking your potential to a successful real estate investing career.

Posted 05:19 AM | Permalink | Comments (2)

There are many myths when it comes to foreclosures and foreclosure investing. One is that foreclosure investing is easy money and it is often seen as a get-rich-quick scheme. Another myth is at the opposite end of the spectrum. This myth says that you can’t make any money with foreclosures. Both of these statements, of course, are false.

However, these myths will continue to surface as foreclosure replaces the housing bubble as the next hot real estate topic. Fraud also comes into the limelight when foreclosures increase as scam artists use some of the techniques of legitimate investors to make a quick buck.

The Los Angeles Times looked at one example of foreclosure fraud last month in an article titled “Foreclosure Fraud Finds a Home.” This article looked at one family who had been defrauded back in 2004 and were still living with the possibility of losing their home two years later. Media attention like this makes it critical for the legitimate foreclosure investor to stay current with laws and investing strategies and separate themselves from the scam artists.

Getting back to the myth of easy money and the get-rich-quick scheme of investing, an educated investor learns quickly to recognize these myths and schemes and moves on to the business at hand. You have to invest the time and money into learning the strategies necessary to turn your foreclosure business into a long-term profitable one.

We’ve previously discussed the definition of foreclosures, why they are currently becoming a hot investment opportunity, and how to find them. This is only the tip of the iceberg. Even after you’ve shopped, found your property, calculated your cost, and estimated your potential profit, you still have to figure out the financing and inspect both the physical property and the title to the property.

These steps take knowledge and knowledge comes with continuing education. So how do you make a lot of money in foreclosures? You have to invest in our own education, learn the strategies, and then take action on what you’ve learned.

Posted 09:55 AM | Permalink | Comments (0)